The FTSE 100 index fell by 2% on Thursday, with tech stocks driving the decline. The index closed at 7,423.56, down from 7,590.91 at the opening. The decline was largely driven by a slump in AI sector stocks, which saw significant losses. Analysts have named several top picks, including Alphabet (GOOGL.L), Microsoft (MSFT.L), and NVIDIA (NVDA.L), ahead of Q2 earnings.
Alphabet's shares fell by 3.2% after the company announced a delay in the release of its Q2 earnings report. Microsoft's shares declined by 2.5% amid concerns over the company's cloud computing business. NVIDIA's shares plummeted by 4.7% after the company reported weaker-than-expected Q2 earnings.
The decline in AI sector stocks has significant implications for the UK's tech industry, with many analysts warning of a potential bubble burst. The sector has seen significant growth in recent years, with AI stocks experiencing a surge in popularity. However, concerns over valuations and profitability have led to a decline in investor confidence.
Analysts are closely watching the Q2 earnings reports of top tech companies, with many expecting a disappointing outcome. The decline in AI sector stocks has also led to concerns over the broader market, with some analysts warning of a potential recession.